2025 Annual Comprehensive Report

has no formal policy on custodial credit risk, but the City utilizes a separate third party custodial trust agent for all book entry transactions, all of which are held in the City’s name.

Federal Home Loan Bank Federal Farm Credit Bank

11.42% 6.02% 30.94% 40.50%

U.S Treasury Notes

NCCMT Government Portfolio

At June 30, 2025, the City’s OPEB Trust had $44,577,443 invested in the State Treasurer’s Local Government Other Post-Employment Benefits (OPEB) Trust; additionally at June 30, 2025 the City’s LEOSSA Trust had $11,695,361 invested in the State Treasurer’s Local Government Law Enforcement Officer’s Special Separation Allowance (LEOSSA) Trust. Both of the State Treasurer’s OPEB and LEOSSA Trust are pursuant to G.S. 159-30.1. The State Treasurer’s OPEB Trust and LEOSSA Trust may invest in public equities and both long-term and short-term fixed income obligations as determined by the State Treasurer pursuant to the General Statutes. An additional $5,000 in demand deposits are held in the City’s LEOSSA Trust for liquidity purposes. At year-end, the State Treasurer’s OPEB Trust was invested as follows: State Treasurer’s Short Term Investment Fund (STIF) 0.02%, which is reported as cash and cash equivalents; State Treasurer’s Bond Index Fund (BIF) 30.53% and Equity Index Fund (EIF) 69.45%. At year-end, the State Treasurer’s LEOSSA Trust was invested as follows: State Treasurer’s Short Term Investment Fund (STIF) 0.08%, which is reported as cash and cash equivalents; State Treasurer’s Bond Index Fund (BIF) 24.45% and Equity Index Fund (EIF) 75.47%. At June 30, 2025 the State Treasurer’s Equity Index Fund (EIF) equities were split with 64.07% in domestic securities and 35.93% in international securities. Level of the fair value hierarchy Ownership of the STIF is determined on a fair valuation basis as of the fiscal year end in accordance with STIF operating procedures. STIF investments are valued by the custodian using Level 2 inputs which in this case involves inputs other than quoted prices included within Level 1 that are either directly or indirectly observable for the asset or liability. The STIF is valued at $1 per share. The STIF portfolio is unrated and had a weighted-average maturity on June 30, 2025 of 2.1 years. Ownership of the BIF is determined monthly at fair value using the same Level 2 inputs as the STIF and is based upon units of participation. Units of participation are calculated monthly based upon inflows and outflows as well as allocations of net earnings. The BIF had and average maturity of 8.11 years on June 30, 2025. The Equity Index Fund, authorized under G.S. 147-69.2(b)(8), is a common trust fund considered to be comingled in nature. The Fund’s fair value is the number of shares times the net asset value as determined by a third party. At June 30, 2025 the fair value of the Fund was $44.3339 per share. Fair value for this fund is determined using Level 1 inputs which are directly observable, quoted prices (unadjusted) in active markets for identical assets or liabilities. Valuation technique North Carolina Department of State Treasurer’s OPEB Trust and LEOSSA Trust investments are measured using the market approach: using prices and other relevant information generated by market transaction involving identical or comparable assets or liabilities. B . Lease Receivable At June 30, 2025, the City was the lessor in various lease contracts for certain properties and equipment. The lease receivable is measured as the present value of the future rent payments expected to be received during the lease term at the determined incremental borrowing rate based on the terms of the agreements. Lease receivable of $11,144,225 and $9,876,653 was recognized in the Governmental and Business-Type activities in the Statement of Net Position,

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